Planning for death is critical

ED LOUGHREY BY ED LOUGHREY

Wednesday

Sep 28, 2011 at 12:23 AM

TAXING ISSUES

We all seem to think that we are indestructible and nothing will ever happen to us. Well a recent death by someone who was an integral part of a major law firm has changed my thinking. It seems that he was the business manager and everything relating to the concern went through his office.

If he was not very diligent in record keeping and up to date, many issues would have arisen. This primer would be of great importance to those left behind whether it is for business partners or the survivors of a family member. If we take the time to complete a booklet with all of the following data, it would be very helpful in time of need and confusion.

Investigation has shown that 50 percent of those over age 65 do not have a will nor have left any information where their important documents are located. Millions of dollars both in insurance policies and bank accounts are left unclaimed because their beneficiaries are unaware of their existence. Many of the following hints are already known but this is just an update.

Personal details and a will (if any) should be listed detailing where the will is kept, who and where it was drawn up, and also indicating the names and addresses of the executors. The names and addresses of the witnesses should also be furnished in the event these people need to be contacted.

A list of people to contact include spouse, children and business partners, close family and friends along with their appropriate contact sources. In addition it is necessary to be in touch with financial adviser, insurance broker, attorneys, and accountants and of course any medical personnel.

What kind of documents might be needed to be used in conjunction with a death or an incapacitation? A birth certificate, marriage certificate, life insurance policies, income protection policy, health plans, long-term care, enduring power of attorney and of course an advance medical directive. To protect personal assets, home insurance policy, car insurance, deeds to property(s) etc.

As part of the financial program, pension plan documents, stock brokerage statements, stock certificates and bank accounts should be listed and described where they are kept. A review of beneficiaries listed on IRA’s, insurance policies and the like should be changed if they are not pertinent at this time. Not only should they be noted, the account numbers and other pertinent data should be affixed. A copy of the prior year’s tax return should be reviewed to crosscheck income data with information available.

In the event a Power of Attorney was previously issued to someone, a copy should be noted and possibly revoked or at least brought up to date. The same is true for medical situations. Employment records should include contact persons and any important data regarding benefits emanating from the job. There might be a pension, a 401k a group insurance policy, stock options not exercised or even medical insurance that the survivor would not be aware. In the case of a businessman, succession and buy and sell agreements should be secured and available.

On the liability side, mortgages and bank loans, guarantees on business debt, autos notes and other long range payments should be included in this inventory of facts. Credit cards should be compared with current billing and any card not being used should be cancelled. Final funeral requests and other instructions regarding organ donation and miscellaneous data will complete this book of assets.

Observation: Something REAL will happen on a reality show.

Edward J. Loughrey, CFE, EA, LPA can be reached at ejltaxes@gmail.com or at 843-705 -7258

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